Reports coming out of India suggest the government is finally moving to ease restrictions on the outsourcing of Phase I trials to the country. However, any concrete measures that emerge could come with significant conditions on licensing and intellectual property attached.

The local reports say drug regulators are preparing the legal ground to allow initial testing of compounds discovered outside India without the need first to submit Phase I data from other markets.

Phase I studies have generally been excluded from the outsourcing boom that has seen a flood of clinical trials into India to take advantage of lower costs, qualified investigators, a large and diverse patient pool, and an improved legal and regulatory framework.

Reuters India quoted Drug Controller General Surinder Singh as saying that both Phase I trials and ‘Phase 0’ studies – first-in-human trials on just a few volunteers – are in the line for change. However, the Central Drugs Standard Control Organisation is also looking at a wider package of check and balances for clinical trials in India, such as more stringent monitoring systems, registration of contract research organisations (CRO) and creating a databank of trial volunteers, Reuters added.

India revised its Schedule Y regulations in 2005 to bring them into line with international standards and eliminate ‘phase lag’. Previously, sponsors could only start a clinical trial in India once the relevant phase had been completed in another market.

But Phase I has remained a sticking point, unless the sponsor wants to file data from another country and then repeat the study in India. Otherwise, Phase I trials are only permitted in India if the drug was discovered locally. Last year there were reports that the Indian government was considering a recommendation from its Drug Technical Advisory Board to lift these restrictions.

According to Dr Shirali Raina, director, clinical operations India for i3 Research, draft regulations on amending the Drugs and Cosmetics Act address the Phase I issue by stating that, for drug substances discovered in countries other than India, "Phase 1 data as required under items 1,2,3,4,5 (data from other countries) and 9 of Appendix 1 should be submitted along with application".

However, the draft continues, "if the IPR [intellectual property rights] for the new drug substance [are] owned by or assigned to an Indian company or if there is a valid agreement of the applicant with the holder of the IPR of the substance for the joint development of the substance for completion of clinical proof, the requisite Phase I studies may be conducted in India with the due permission from the licensing authority for generation of clinical data…".

Raina stressed that the proposals are still open to debate. There are suggestions from some quarters that there should be no IPR conditions attached to conducting Phase I trials in India, as this may be problematic when the work is outsourced to a contract research organisation. Another proposal is that Phase I trials should be permitted for drugs discovered abroad if the sponsor has a permanent establishment in India.

The thinking behind the proposed IPR/licensing conditions, Raina explained, is that they would enable Indian companies conducting joint R&D programmes with multinationals to run cost-effective Phase I studies in India.

The draft version was only published recently and normally there is a period of one to two months for feedback before the government will move towards finalising its proposals.

The mooted changes come at a sensitive juncture for the clinical trial sector in India. Claims that Indians are being used as guinea pigs to carry a CRO boom driven by outsourcing of international drug development programmes were encouraged last month by the revelation that 49 young children had died in clinical trials at the prestigious All India Institute of Medical Scientists (AIIMS) since the beginning of January 2006.

While no clear evidence has emerged that the deaths were related to drugs used in the trials, suspicions were fanned by the presence of five ‘foreign-manufactured’ pharmaceuticals among the various interventions used in the AIIMS studies.

If the Phase I amendments do go through, they will add momentum to what is already a very buoyant sector, albeit one that faces a widening gap between supply and demand in the human resources needed to maintain the current pace of growth.

A recent Planning Commission report said the market for clinical research in India, now worth around US$300 million, could reach US$1.5-US$2 billion by 2010. Other projections for the same timescale are more subdued, such as the oft-quoted figure of US$1-US$1.5 million from consultants McKinsey.

Speaking earlier this year at the annual spring conference of the Institute of Clinical Research (ICR) in Birmingham, Professor Anthony Woodman, chief executive officer of the Institute of Clinical Research India, suggested the true potential of the Indian market may be closer to US$500 million by 2010.